From Goldman to Google, with Love

I read this week’s inane BusinessWeek cover story on Google as basically a love note from the investment banking industry to the search company. In essence we discover that VCs, bankers, et al., people who are used to being treated as sultans of swing, are treated like dirt by the kids at Google. And BusinessWeek partly revels in it, but mostly makes the “Google-scaring” case for why Google will eventually have to make some sizable fee-creating acquisitions — Look what happened to Yahoo! Look what happened to Doubleclick!

Maybe, but it won’t be because of the arguments that conclude this piece. The authors end with the bold claim that Google has some sizable holes in its product line, the sort of holes which could best be filled by M&A. Well, that caught my attention — so, what are they? Well:

For starters, Google has a long way to go to match the breadth, depth, and richness of Yahoo’s portal. Ditto a peer-to-peer marketplace along the lines of an eBay, as well as Microsoft-like software applications.

You have to be kidding me. Google needs to make acquisitions to create a portal? Or to mimic Microsoft? Or eBay? Oye, what madness passes out there for rational thinking.

obAside: My favorite stat in the piece? That Google’s largest acquisition ever comes out to the total of $102-million, which is what it paid for Applied Semantics back in 2003. While I knew Google hadn’t done anything large with its billion-dollar cash horde, I didn’t realize were still only barely cracking the $100-million mark.

Comments

The cover story of the current Business Week is Googling for Gold. Much of it is about the relationship between Google and venture capital. Here are some quotes from the article, along with my comments on some of them.
Instead of nurturing the most…

GOOG should just open a venture shop ( a website and everything) and get on with business.
I do find it interesting with respect to David Beisel’s “VC Bipolarization”, that GOOG is trying out a new business model and it’s disrupting the venture market.
If Google sets up a bona fide venture operation, and the whole thing actually works, and they get copied, then we’ll have something to talk about.
Untill then, I’m betting all of this is hype. Entrepreneurs are imprudent to start businesses with the hope to get acquired by any particular party, and at the end of….Google guys are pretty smart and they’re not gonna on a shopping spree just for the hell of, or for the fear of not capitalising on their market cap.
Basically, I don’t know what BW is on about, but I’m not seeing any fundamental change in the venture market. For all the hype- it’s definitely, business as usual…and the traditional stepped financing approach to entrepreneurship is here to stay.
I’m not betting on VC’s getting cut out of the process. Although, I confess that if it doesn’t happen now, it’s going to happen in the future if the industry doesn’t take steps to evolve and offer better financing deals.
The guys who are raising $500 mill funds to finance A rounds, are testament that the industry is broken.